The seminal Institute of Medicine (IOM) report found that over 98,000 Americans die every year due to errors and adverse outcomes at a cost of between 17 and 29 billion dollars per annum. Payers, providers and patients are demanding a reduction in these events. Nurse leaders, nurse actions, and their work climates are critical to effecting change in patient outcomes. The nurse leader is significant, yet nursing research has mostly relied on global measures of leadership without considering the leadership research advances from industrial psychology. Research on nursing leadership can benefit from adopting a leader member exchange (LMX) perspective on leadership, which posits that a leader is engaged in ongoing dyadic relationships with staff (member) and that the quality of these relationships is an important predictor of employee's attitudes and beliefs, thus outcomes. Moreover, the LMX perspective on leadership provides conceptual and methodological means for studying outcomes at multiple levels such as individual employees and work units. The purpose of this study is to use the LMX perspective to examine the effects of leadership on safety climate and adverse patient outcomes. The aims are: 1) to investigate the relationship between LMX and safety climate;2) to examine if LMX and safety climate influence the rates of adverse patient outcomes;3) to explore the effect of staff and unit characteristics on the relationship between safety climate and LMX and adverse patient outcomes. The proposed study will use a multi-level cross-sectional design to examine these relationships in 34 inpatient units. Respondents will be unit directors (n=34) and their associated staff members (n=1500) in a 700 bed acute tertiary care facility who will be asked to complete the Agency for Healthcare Research and Quality Hospital Survey on Patient Safety Culture and the Leader-Member Exchange Tool. Unit characteristics and adverse patient outcome data will be obtained from hospital administrative and performance improvement information systems. Statistical analysis will use descriptive and exploratory data analysis including standard regression and hierarchical linear modeling to take into account the nested data structure. Findings from this study have the potential to improve understanding of relationships between organizational characteristics, leadership behaviors, and adverse events. With this knowledge, it may be possible to develop tailored interventions to promote behavior change and enhance leadership skills to prevent adverse patient outcomes.